Lyft $LYFT ( ▼ 17.12% ) shares tumbled in premarket trading after the ride hailing company reported a surprise operating loss and issued weaker than expected guidance for the current quarter. The drop came even as Lyft highlighted progress in profitability and announced a major share buyback.
Investors focused instead on rising competitive pressure and signs that near term growth may be slowing.
A Rough Signal for the New Year
For the first quarter of 2026, Lyft $LYFT expects adjusted EBITDA between $120 million and $140 million. The midpoint came in below what Wall Street had been modeling, disappointing investors looking for stronger momentum.
Gross bookings guidance of $4.86 billion to $5 billion was roughly in line with expectations, but not strong enough to offset concerns about profitability.
Competitive Pressure Hits the Bottom Line
Lyft $LYFT reported a $188.4 million operating loss for 2025, citing an unexpected increase in price promotions from rivals. That revelation raised fresh concerns about the intensity of competition in the ride sharing market and the company’s ability to maintain margins.
In the fourth quarter, Lyft delivered adjusted EBITDA of $154.1 million, topping expectations. Revenue came in at $1.6 billion, however, below the $1.7 billion analysts were expecting, partly due to legal, tax, and regulatory reserve changes.
Big Bet on AVs and Buybacks
CEO David Risher framed 2026 as a turning point, calling it the year of autonomous vehicle deployments both in the US and internationally. Lyft $LYFT is betting that AV partnerships can reshape its long term economics and growth profile.
The company also announced an additional $1 billion share buyback, on top of a previously authorized $750 million program. Even with that support, investors appear more concerned about near term losses and competitive pressures than financial engineering.